We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Children's Place (PLCE) Posts Wider Than Expected Q1 Loss
Read MoreHide Full Article
The Children’s Place, Inc. (PLCE - Free Report) disappointed with its first-quarter fiscal 2024 performance. This pure-play children’s specialty apparel retailer posted a loss that was wider than anticipated. Additionally, its revenues missed the Zacks Consensus Estimate and declined year over year.
Q1 Details
The Children’s Place posted an adjusted loss per share of $1.18, wider than the Zacks Consensus Estimate of a loss of 88 cents. However, the loss narrowed from an adjusted loss of $2.00 reported in the year-ago quarter.
Net sales of $267.9 million declined 16.7% year over year, primarily due to a decrease in retail sales, caused by factors such as fewer stores and reduced foot traffic. Additionally, e-commerce demand also declined due to reductions in marketing efforts from liquidity challenges early in the quarter and a fall in wholesale revenues. Meanwhile, comparable retail sales saw a decline of 11.7% in the quarter.
Adjusted gross profit was $93.6 million, down from $96.5 million reported in the year-ago quarter. The adjusted gross margin expanded 500 basis points (bps) to 35% due to lower product input costs, including cotton and supply-chain expenses, which had affected margins in the prior year. Additionally, the company benefited from improved leverage on e-commerce freight costs resulting from its new shipping threshold for free shipping. However, these gains were somewhat diminished by margin pressures from aggressive promotional strategies.
Adjusted selling, general and administrative (SG&A) expenses were $88.6 million, down from $109.2 million in the year-ago quarter. Adjusted SG&A, as a percentage of sales, leveraged 80 bps to 33.1%. This mainly resulted from decreases in store payroll and home office payroll, and reductions in marketing costs.
The Children's Place, Inc. Price, Consensus and EPS Surprise
At the end of the first quarter, the company operated 518 stores with 2.5 million square feet, marking a 13.8% reduction in square footage from the previous year. Also, it closed five stores in the past three months.
Other Financial Details
The Children’s Place ended the quarter with cash and cash equivalents of $13 million. The company had $226.1 million outstanding on its revolving credit facility as of May 4, 2024. It generated a loss of $110.8 million in operating cash flow in the three months ended May 4, 2024. Stockholders' deficit at the end of the quarter was $34.9 million.
Shares of this Zacks Rank #3 (Hold) company have lost 31.4% in the past three months against the industry’s growth of 8.4%.
Image Source: Zacks Investment Research
Key Picks
We have highlighted three better-ranked stocks, namely, Abercrombie & Fitch Co. (ANF - Free Report) , The Gap Inc. and DICK'S Sporting Goods (DKS - Free Report) .
Abercrombie & Fitch, a specialty retailer of premium, high-quality casual apparel, currently sports a Zacks Rank #1 (Strong Buy). ANF has a trailing four-quarter average earnings surprise of 210.3%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales and earnings indicates growth of 10.5% and 47.6%, respectively, from the year-ago figures.
Gap, a fashion retailer of apparel and accessories, currently flaunts a Zacks Rank #1. GPS has a trailing four-quarter earnings surprise of 202.7%, on average.
The Zacks Consensus Estimate for Gap’s current financial-year sales and earnings per share suggests a rise of 0.1% and 17.5%, respectively, from the year-earlier levels.
DICK'S Sporting operates as an omni-channel sporting goods retailer. It currently carries a Zacks Rank #2 (Buy). DKS has a trailing four-quarter earnings surprise of 4.7%, on average.
The Zacks Consensus Estimate for DICK’S Sporting current fiscal-year sales and earnings implies an improvement of 1.8% and 6.3%, respectively, from the prior-year numbers.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
The Children's Place (PLCE) Posts Wider Than Expected Q1 Loss
The Children’s Place, Inc. (PLCE - Free Report) disappointed with its first-quarter fiscal 2024 performance. This pure-play children’s specialty apparel retailer posted a loss that was wider than anticipated. Additionally, its revenues missed the Zacks Consensus Estimate and declined year over year.
Q1 Details
The Children’s Place posted an adjusted loss per share of $1.18, wider than the Zacks Consensus Estimate of a loss of 88 cents. However, the loss narrowed from an adjusted loss of $2.00 reported in the year-ago quarter.
Net sales of $267.9 million declined 16.7% year over year, primarily due to a decrease in retail sales, caused by factors such as fewer stores and reduced foot traffic. Additionally, e-commerce demand also declined due to reductions in marketing efforts from liquidity challenges early in the quarter and a fall in wholesale revenues. Meanwhile, comparable retail sales saw a decline of 11.7% in the quarter.
Adjusted gross profit was $93.6 million, down from $96.5 million reported in the year-ago quarter. The adjusted gross margin expanded 500 basis points (bps) to 35% due to lower product input costs, including cotton and supply-chain expenses, which had affected margins in the prior year. Additionally, the company benefited from improved leverage on e-commerce freight costs resulting from its new shipping threshold for free shipping. However, these gains were somewhat diminished by margin pressures from aggressive promotional strategies.
Adjusted selling, general and administrative (SG&A) expenses were $88.6 million, down from $109.2 million in the year-ago quarter. Adjusted SG&A, as a percentage of sales, leveraged 80 bps to 33.1%. This mainly resulted from decreases in store payroll and home office payroll, and reductions in marketing costs.
The Children's Place, Inc. Price, Consensus and EPS Surprise
The Children's Place, Inc. price-consensus-eps-surprise-chart | The Children's Place, Inc. Quote
Store Update
At the end of the first quarter, the company operated 518 stores with 2.5 million square feet, marking a 13.8% reduction in square footage from the previous year. Also, it closed five stores in the past three months.
Other Financial Details
The Children’s Place ended the quarter with cash and cash equivalents of $13 million. The company had $226.1 million outstanding on its revolving credit facility as of May 4, 2024. It generated a loss of $110.8 million in operating cash flow in the three months ended May 4, 2024. Stockholders' deficit at the end of the quarter was $34.9 million.
Shares of this Zacks Rank #3 (Hold) company have lost 31.4% in the past three months against the industry’s growth of 8.4%.
Image Source: Zacks Investment Research
Key Picks
We have highlighted three better-ranked stocks, namely, Abercrombie & Fitch Co. (ANF - Free Report) , The Gap Inc. and DICK'S Sporting Goods (DKS - Free Report) .
Abercrombie & Fitch, a specialty retailer of premium, high-quality casual apparel, currently sports a Zacks Rank #1 (Strong Buy). ANF has a trailing four-quarter average earnings surprise of 210.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales and earnings indicates growth of 10.5% and 47.6%, respectively, from the year-ago figures.
Gap, a fashion retailer of apparel and accessories, currently flaunts a Zacks Rank #1. GPS has a trailing four-quarter earnings surprise of 202.7%, on average.
The Zacks Consensus Estimate for Gap’s current financial-year sales and earnings per share suggests a rise of 0.1% and 17.5%, respectively, from the year-earlier levels.
DICK'S Sporting operates as an omni-channel sporting goods retailer. It currently carries a Zacks Rank #2 (Buy). DKS has a trailing four-quarter earnings surprise of 4.7%, on average.
The Zacks Consensus Estimate for DICK’S Sporting current fiscal-year sales and earnings implies an improvement of 1.8% and 6.3%, respectively, from the prior-year numbers.